Moratorium Damages County’s Competitiveness and Affordability, Fails to Fix School Capacity Shortfalls.

Below you’ll find some highlights from a blogpost from Planning Board Chairman Casey Anderson. I encourage you to read the entire post, which includes lots of informative charts and tables.

1. New development is not driving school overcrowding.

With the possible exception of Clarksburg, the surge in school enrollment faced by MCPS in recent years is attributable to turnover in housing built decades ago.

2. Moratoria have failed to solve the overcrowding problem and cut off a source of funds to build schools.

Some argue that even though turnover is largely responsible for overcrowded schools, the moratorium serves a useful purpose in generating political pressure to solve school capacity shortfalls, and that the threat of a moratorium will force elected officials to focus on the issue.

The short answer is we tried it and it didn’t work. The Walter Johnson, Blair, Northwood, and Einstein clusters all went into moratorium in July 2019 despite real estate developers warning that housing development projects in these areas would be delayed or killed. The deadline came and went, the projects were put on ice, and no funding for capacity expansions was accelerated from any source.

A moratorium also makes it more difficult for MCPS to deal with their capacity issues because impact taxes help fund the cost of capacity projects. The Planning Board has proposed adding additional payments in overutilized clusters that would require higher payments (utilization premium payments) in more crowded school clusters, but the idea is the same: new development pays more than its “share” and stopping development cuts off a needed supply of funds for the school system’s other needs.

The fact that moratoria are allowed to take effect despite their impact on development reveals the flaw in an implicit premise of the moratorium policy — namely that real estate developers will find a way to get schools built rather than see their business grind to a halt. The truth is that developers often operate in multiple jurisdictions, and they raise money to finance their projects from investors who are choosing among opportunities in every part of the country and even the world. Developers don’t like seeing their projects held up after they have spent time trying to get them lined up, but ultimately most of them don’t need to be here because they can acquire land to develop somewhere else. Montgomery County taxpayers have more to lose by stopping new housing construction than real estate developers, school board members, or any other group.

3. We are not producing enough housing – and moratoria make the housing supply problem worse.

Our school impact fees, and moratorium policy are damaging our ability to provide the housing our residents and economy need.

The reasons for our lagging housing production are many — including high costs of materials, shortages of skilled labor, and constraints on the availability of land suitable for development — but impact fees for schools are certainly a contributor.

A comparison of Montgomery County’s rules to the approach taken by our peers and competitors in the region is telling. We have the highest school impact payments in the greater Washington region except for Loudoun County, which is in a stage of its evolution where greenfield development is the norm.

The end of the moratorium!

Fabulous news! The Planning Board will receive the FY21 annual school test on Thursday, and the current moratorium for the Walter Johnson cluster will come to an end. Here is the staff memo. This means that pending North Bethesda developments, ranging from Twinbrook to Rock Spring, could move forward!

From the staff report:

The test also finds three additional clusters – Montgomery Blair, Albert Einstein, and Walter Johnson clusters – to be ‘open conditionally’ as shown in Table 2. The projected enrollment for the high schools at these clusters indicate that they will exceed the test’s utilization standard in the 2025-2026 school year as well, but the enrollment burden at these schools are expected to be relieved by approved capital projects at other high schools – Northwood HS and Woodward HS – through future student reassignments.

WJ Moratorium Review at the Planning Board Thursday

The Planning Board will review the annual schools test next Thursday, which will determine if a school cluster (including the Walter Johnson cluster) would be placed in moratorium and if a Preliminary Plan of Subdivision could be submitted .

The staff report can be found here and recommends the Walter Johnson cluster be put in moratorium for one year because WJ is at 129.3% of capacity.

Building Moratorium in the White Flint? No, Thanks.

Dear County Council and County Executive:

As you know, the Walter Johnson cluster is poised to go into moratorium July 1 because it will be 120% overcapacity. Friends of White Flint, a nonprofit organization composed of residents, businesses, and property owners, strongly urges you to find a solution that would prevent this moratorium.

After losing Amazon last year, the Pike District/White Flint area is just now enjoying some forward momentum on fulfilling the promise of the White Flint sector plans. The long-awaited Western Workaround will be completed next year. Many property owners are gearing up to re-start or begin the process of redeveloping their properties, including East Village/North Bethesda Gateway, Gables, Strathmore Square, Wilco/Wilgus projects, Guardian, Grand Park/Rankin, and others. An unnecessary one-year moratorium will quickly put a halt to the much-needed redevelopment of the Pike District/White Flint area. 

Underwriters and financing will run scared because there are no guarantees this moratorium will last just one year. Without funding, the redevelopment of the Pike District will come to standstill. Funding is a finite and scarce resource, and there are many other projects in Virginia and DC without moratoria to which investors will move their money. The millions of dollars developers invested in this area could easily go to waste, never to be seen again, if this moratorium becomes a reality.

We agree that capacity issues at Walter Johnson must be addressed. Fortunately, the county has done just that by re-opening Woodward as a high school.  Re-opening Woodward neatly and completely solves the Walter Johnson capacity issue.  A small two-year delay in the re-opening of Woodward caused by using the building as a holding school for Northwood doesn’t change that fact; it only alters the timing for a very short period of time.  

While technically this solution falls outside of the required time frame for preventing a moratorium, it seems absurd to stop the vital redevelopment of the Pike District on a tiny technicality. Enacting a moratorium for technical reasons is exactly what Montgomery County ought not to be doing to fulfil its desire to be business-friendly and increase its tax base to support all that Montgomery County wants to accomplish.

In fact, it could be reasonably argued that since Northwood’s temporary placement in Woodward would still permit 300 Walter Johnson students to attend Woodward while Northwood is there, there actually is no capacity issue at Walter Johnson to trigger a moratorium.

When you also consider that nearly all the new students of the Walter Johnson cluster arise from neighborhood turnover and not new development, according to the Montgomery Planning Department’s comprehensive study, it simply makes little sense to stop building the very residences that fund new schools yet add little to the schools’ burdens.

The solution to the overcapacity issue at Walter Johnson has been planned, funded, and fully addressed. New development provides funding and few new students for schools. Implementing a moratorium will be incredibly detrimental to the White Flint area and all of Montgomery County, and we strongly urge you to find a workaround and not put the Pike District in moratorium.

Thank you for your time and consideration.

Have you heard? There might be a building moratorium in the WJ Cluster.

This potential building moratorium has probably flown under your personal news radar, but it could have real consequences in the Pike District. Basically, Walter Johnson High School and five other school clusters could be placed under a one-year residential building moratorium July 1 because the schools are at 120% or more of their student capacity.

Casey Anderson, Planning Board Chair, said during a WAMU interview, “If you have a development moratorium, then you’re cutting off a source of revenue that can help to solve the problem. In fact, you’re arguably cutting off more revenue than it would cost you to accommodate the new students. The other issue is that over the medium term, or even the short term, we’re really constraining our economic development more generally because our workforce needs housing that meets the needs of employers.”

The Planning Department has analyzed data from MCPS and concluded that most new students aren’t coming from new housing — they live in existing homes. Of the roughly 4,000 new students attending schools targeted for moratoria, only about 200 of them — or 5 percent — occupy new developments. That illustrates how, despite the myths, new construction does not necessarily increase school population.

In the same interview, Coalition for Smarter Growth said, “The moratorium is a blunt and counterproductive tool. When the moratorium is in effect, the county misses out on all of the benefits of new development, like providing more homes around transit.”

We’ll be writing more about this issue over the next couple of weeks, but here are a few articles to catch you up.

Video from Fox 5 news. (Ignore the first couple of insipid interviews and get to the part where Casey Anderson speaks.)

Channel 9 news story and video